The phantom rental property scam - Video script
Watch out for this scam if you're a tenant!
Watch out for this scam if you’re a tenant!
If you’re using the internet to look for a place to rent, you need to keep your wits about you. And if you're asked to 'prove funds' via money transfer before you view a property, great big alarm bells should start ringing.
Here's how the scam works: Bogus landlords (who often say they live abroad) ask possible tenants to make a 'secure' money transfer to a trusted person (for example to their partner or a close friend).
The potential tenant is then asked to send a copy of the receipt to the landlord, to prove they have enough money to cover the deposit and rent before they’re shown the property.
Here today, gone tomorrow
You haven't actually transferred the money to the landlord - you've transferred it to someone you trust - so no one dodgy can make off with your funds, right?
Wrong. When would-be tenants go to collect their cash from the money transfer firm they've used, they're told that the money has already been withdrawn.
And of course - the room or property doesn't exist.
How to stay safe
Here are four top tips to help you avoid rental scams like this:
1. Never use money transfer as a way to 'prove' funds, or as a method of payment to someone you don't know.
2. If at all possible, meet the landlord in person. And never hand over any money until you've thoroughly read through a written contract.
3. All landlords must now be part of a registered Tenancy Deposit Scheme which protects your deposit.
4. Finally, if you're not comfortable looking for a rental property online, use a high street letting agent instead.
That’s all from me for today - hope to see you again soon at lovemoney.com.
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Comments
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Thanks for all your comments, Yiam Cross - No, they don't persuade your trusted person to withdraw your funds - they use the details on the money transfer receipt (which you've sent to them) to hack into your money transfer account and nick your cash. It's similar to using someone's card details to steal from their bank account. In fact Citizens Advice likens giving a stranger your money transfer receipt to 'giving them your PIN'. So, it doesn't necessarily mean that the money transfer firm used is a deliberate participant in the scam. Hope that makes things a bit clearer, Cheers, Serena
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So they persuade your trusted person to take the money out and send it to them? Or do money transfer companies allow someone in Nigeria to collect money that's been transferred to a branch in a different country in someone else's name? I would have thought any money transfer company that just gives your cash away to someone claiming to be the recipient is going to be liable for your loss or do they have no duty to ensure the money is not paid out to just anyone?
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A friend of mine was instructed to do this when he was interested in a flat in Oval, London last year. Alarm bells rang for me, and I told him to keep well away!
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24 March 2010